Cardboard Cathedrals and VAT on Church Improvements

In Christchurch, New Zealand, it seems that it will be too expensive to repair the cathedral which was badly damaged in last year’s earthquake. Instead, as David Keen and the press report, it is to be replaced by a cardboard cathedral. Yes, cardboard will be the main material for the proposed new 700 seat structure, and its cost will be a fraction of what it would take to rebuild the historic stone building.

Here in the UK, could we see our historic cathedrals and other church buildings being abandoned and replaced with cardboard structures? That is the worrying prospect which is being opened up by the government proposal to charge VAT on repairs and improvement to listed buildings.

The effect of this proposed “Heritage Tax” would be to add 20% to the cost of work on church buildings – at least on those listed as of historic interest. The likely result of this price rise is that many schemes for vital repairs, already hit by the drop in charitable giving during the continuing “double-dip” recession, will simply become unaffordable. This means that more and more congregations will be forced to leave their historic buildings and find temporary alternatives. Also in danger of being abandoned are schemes for adapting outdated buildings to provide important community facilities.

Up to now work on listed buildings has been zero rated for VAT, in recognition of their historical significance and of the extra cost of using appropriate designs and materials. The Chancellor of the Exchequer wants to remove this concession, partly to close a loophole by which rich people living in listed homes can have swimming pools installed free of VAT. But he has been widely criticised for a measure which will also hurt churches wanting to use their resources in ways which the government claims to be promoting as part of its “Big Society” initiative. However, there are now reports that the Chancellor is preparing to make a U-turn on this issue, partly in response to an e-petition Bring back zero-rate VAT on alterations to listed churches which the Church Mouse has been strongly promoting.

I have mixed feelings on this issue. Indeed in response to one of the Church Mouse’s first plugs for this petition, I wrote the following on Facebook on 9th April:

I won’t sign, probably like many other people, because I don’t believe that churches, i.e. congregations and denominations, should be in the business of preserving architectural heritage. If a church can’t afford its building, including paying the normal rate of tax on repairs, it should move into an affordable alternative. If the government then has to pay for the upkeep of the historic building, that’s its problem.

So, yes, if a congregation can’t afford to repair or improve its cathedral, then it should leave it and build a new one, perhaps from cardboard, which would probably meet its needs more economically. Or if the cathedral is really of sufficient historic interest, its administrators should be able to raise the funds for its upkeep from other sources, such as charging tourists for admission. If, however, the historic interest is largely in the mind of the Victorian Society, then they should be responsible for the cost of preserving the all too abundant heritage of their favoured period.

But I am aware that for many congregations there is no feasible alternative to a historic church building. This is most often true in villages, where a mediaeval church may be the only remaining community building. This church is clearly the most suitable focus for continuing Christian witness. It may also be appropriate to alter it to provide other facilities needed by the local people.

Because of this last factor, I have changed my mind and signed the e-petition. I would encourage my readers to think through the issues and decide for themselves whether to join me.

We were in Napier,around the aniversary of their quake, when this one hit. We did have to change our South Island plans very quickly as Christchurch was on the itinary for a week later. A fascinating way of going forward. And the climate in Christchuch is not very different from many parts of the UK. In Feb/Mar 2011, Auckland was in the lower 80s and Dunedin down the coast was in the lower/mid 60s; and we had rain.

On the costs of ancient piles, including VAT if charged, one problem, which hit one of our local Parishes a few years ago, is that a congregation cannot just walk away from its Parish church and leave it to others, e.g. that nice Mr Osbourne. Unless a due process (boring long winded etc) is followed, they retain the liability largely even if that does include listing placed on it by others. Actually a good deal. Historicists can get buildings listed without carrying the full responsibilities and results of their actions and wishes. I am sure many Parishes would love to pull their over large piles down and do something else, but sadly life ain’t that simple. And non conformists can face the same tensions, though they don’t always have the CoE’s complex redundant building procedures.

I’m reminded of the song …”they paved paradise and put up a parking lot…”

I love our medieval Cathedrals …I have a mental picture of a poor peasant whose cow had dried up – whose wife had died of some very curable disease -at his wits end – who came into such a building to seek God’s help….and found it !!..NOT because of the building – (that was just a focus) – but because God meets our needs.

Looking at the previous post….Actually ….life IS that simple….just visit Coventry….not pulled down by the parishioners – but the effect was the same.

The strange thing about the CofE is that….. if nobody stands for election to the PCC – the incumbent retires – the wardens resign – then the building belongs to….whom…?

Colin, if the Church of England ties up its own congregations in bureaucracy, that is its problem, not one for the government. I realise this isn’t a matter only for the C of E – here in Essex there are also many historic non-conformist chapels.

David, I too was wondering what happens if the church just ceases to exist. Also, what happens if it goes bankrupt? I’m sure the C of E has its procedures in such cases. But in the end the denomination or the diocese would end up responsible for the building.

David’s “what if” is fascinating if unlikely. But the key difficulty is that the official criteria for listing does not demand consideration of the financial effects on listing on the owners and ensure that the building can be maintained and reapired. The owners, whether you as a householder, a business (the Hoover Building on the A40?) or a body such as a PCC, are then dumped with the reponsibilities and liabilities which flow from listing. In other words, even if a PCC decides on a move to a more suitable building, they, or the designated authority if the old building is decalred redundant, still carry the liability for the old . A classic case of someone having authority to make high impact decisions without having to live with the responsibilities that arise from them.

The solution would seem to be that those who apply for a building to be listed should stump up a suitably large trust fund to meet on going repair and maintenance costs over and above what an owner reasonably requires for his own purposes. How you make that work – and retrospectively, I have no idea.

Meanwhile I am thankful that our own Parish church is a simple and compact product of the functional 60s, and not an oversized pseudo gothic pile.

Colin, I think David and I are referring to a situation where a charity is insolvent and chooses to close down. In such a case the charity would probably need to call in administrators. See this advice. But I’m not sure what the position is when there are no actual creditors, just a legal requirement to incur expenses which cannot be paid. I do know that private owners of listed buildings cannot be made to pay for repairs if they are insolvent. Also I’m not sure if there are special factors here relating to the Church of England. But I’m sure that there would be a complex legal battle involved if the government were to attempt to force a congregation to pay for repairs to a listed building which was unused and closed up, where there are in fact no funds available for the repairs.

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